U.S. bill auctions weakest since 2008 ahead of holiday

NEW YORK (Reuters) - Investors gave the cold shoulder to $125 billion of U.S. Treasury bills for sale on Monday with bidding for some issues at its lowest in nearly a decade.

Analysts blamed poor demand ahead of the U.S. Independence Day holiday on Wednesday when U.S. financial markets will be closed.

Perhaps some market players’ focus on the World Cup might have contributed to the tepid demand for the latest T-bill supply, analysts said.

“The holiday week and the simultaneous Brazil-Mexico World Cup match might have had a negative impact on auction participation,” Jefferies & Co. money market strategist Tom Simons wrote in a research note.

The Treasury on Monday sold $48 billion of three-month bills at an interest rate of 1.940 percent. The ratio of bids to the amount offered, which is a gauge of auction demand, was 2.62, which was the lowest since Dec. 29, 2008, Simons said.

It also auctioned $35 billion of one-month bills at an interest rate of 1.860 percent. The bid-to-cover ratio for the latest one-month bill supply was 2.45, which was the weakest since July 29, 2008.

The Treasury’s $42 billion of six-month bills fared somewhat better than the day’s other two auctions.

The latest six-month T-bill issue fetched an interest rate of 2.085 percent. The bid-to-cover ratio was 2.83, which was lower than last week’s six-month auction.